Do Hospitals Still Make Sense? The Case for Decentralization of Health Care

University of Colorado School of Medicine; UCHealthTufts University Medical School

From their humble origins as charitable almshouses for the poor and destitute who could not afford to receive care at home, hospitals have evolved into large, profitable, expensive, technology-laden institutions at the epicenter of the health care universe. Almost every community has at least one general centralized hospital, and most have more than one — with those that don’t being considered “underserved” or “frontier” communities, and with the hospitals in such communities sometimes receiving the designation of “critical access.” But health care is changing. The exponential growth of digital and virtual health, the deployment of advanced technology deeper into the community, and the movement of higher-acuity care into the outpatient environment create opportunities to shift from a large, centralized health care system to a smaller, faster, more cost-effective one in which health care is more accessible, more affordable, more personal, and closer to home.

The Hospital as the “Hub”

Until recently, centralizing care around a hospital made sense. Without electronic health records (EHRs), it was nearly impossible for health care providers to understand care longitudinally or to coordinate care without bringing patients to one physical place where information could be organized with the use of archaic documentation management systems. Moreover, the hyper-subspecialization of medicine and the frequent reliance on advanced technology such as imaging, lasers, and expensive chemotherapeutic, biologic, or immunologic agents requiring specialized real-time compounding necessitated a financial model that allowed the aggregation of high fixed costs.

The traditional delivery model of a hospital as the ‘hub’ of care, with a single centralized facility providing every facet of disease management and treatment, from specialized surgical cancer care to routine eye exams and chronic blood pressure management, should be questioned.”

In 2011, U.S. hospitals reported an estimated 49 million surgical procedures in adults and 136 million emergency department (ED) visits, with the rate of care utilization growing faster than population growth. As a result, in 2015 alone, U.S. hospitals hired 100,000 new employees. In a fee-for-service system that rewards hospitals for any care that is provided, there is no reason to limit offered services. But despite the proliferation of mega-hospitals (>1000 beds), capacity is not meeting the growing demand for services. Hospitals around the country are struggling to keep up, with admitted patients being treated in EDs while waiting for inpatient hospital beds to become available. Building bigger hospitals, although profitable in the fee-for-service environment, is not a viable option in financial risk-sharing models. The traditional delivery model of a hospital as the “hub” of care, with a single centralized facility providing every facet of disease management and treatment, from specialized surgical cancer care to routine eye exams and chronic blood pressure management, should be questioned. Furthermore, admission to a hospital can be dangerous, with 1 of every 25 hospitalized patients being expected to develop a hospital-associated infection, slightly worse than the risk profile of injury from bungee jumping.

The Role of Virtual Health and Remote Monitoring in the Decentralization of Care Delivery

There is good reason to seek out new ways of delivering care. In the not-too-distant future, health delivery systems will, and should, be paid for keeping people healthy and out of the hospital rather than for procedures and admissions. The economic framework of health care will be turned upside down, with profit being directed toward maintaining the health of populations rather than toward just thwarting illness. Surgical procedures, which represent the golden goose of profit for health care, may actually become an expense. It is challenging, if not impossible, for most large hospitals, with their high fixed costs, to morph into nimble, low-cost businesses. The delivery models that will succeed are those that do not simply extend the reach of the hospital but begin to entirely replace the hospital as we know it.

In the not-too-distant future, health delivery systems will, and should, be paid for keeping people healthy and out of the hospital rather than for procedures and admissions.”

Today, remote monitoring, wearables, faster wireless communication devices, robust EHR platforms, virtual health visit capabilities, and, eventually, prescriptive intelligence, are making it less necessary for patients and physicians to always interact within the four walls of a hospital or clinic. Whereas such technology previously was reserved for the purpose of providing care in the most remote areas, an entire industry is increasingly leveraging the power of “mobile health” to connect patients with providers. For example, in Johns Hopkins’ Hospital at Home (HaH) program, patients are admitted to their own homes rather than to the hospital, and their care is managed through the use of advanced remote monitoring and telemedicine. Patients are only eligible for HaH if they are sick enough to require hospitalization. Patients are linked to the hospital through remote monitoring technology and receive daily visits from a physician and other caregivers (e.g., nurses, respiratory therapists, and physical therapists).

Electrocardiograms, x-rays, and ultrasounds can all be performed in the patient’s home with use of portable technologies. In a pilot study, the total costs of care were reduced by 19%, and only 2.5% of 323 patients had to be transferred into the hospital from home. Similarly, in the University of Colorado system, patients who otherwise would have to drive hundreds of miles for a routine postoperative evaluation are able to skip the long drive and visit with their surgeon virtually from the comfort of their own home, avoiding countless hours in a car and the resulting costs. Such home admission programs represent a radical shift from pulling patients in, to sending care out.

CommunityParamedicine

Decentralization is also being achieved through the use of well-trained health care providers on wheels: paramedics and emergency medical technicians in ambulances. This ready-made army of mobile health clinics has been used to create a new category of care delivery known as community paramedicine. The Geisinger Health System in Pennsylvania calls its community paramedicine program the “Mobile Health Team” and recently completed a pilot program in which community paramedicine was used for patients with congestive heart failure (CHF). In this model, the team is activated when a patient with CHF is discharged from the ED. Community paramedics visit the patient at home, perform a detailed assessment, reassess the patient’s weight and condition, and, with remote physician direction, administer intravenous diuretics and other patient-centered care. Over a 1-year period, this pilot program prevented 42 potential admissions and 168 inpatient days among 704 patients, reduced ED visits for CHF by 50%, and reduced overall readmissions by 15%.

Such home admission programs represent a radical shift from pulling patients in, to sending care out.”

Similarly, at University of Colorado Health, we have instituted a mobile stroke unit (MSU) that is dispatched directly to patient homes in a specialized ambulance that is equipped with a small CT scanner, point-of-care testing capabilities, and virtual care access to a stroke specialist, thereby enabling rapid remote diagnosis and prehospital administration of thrombolytic therapy. While still early, data from other sites with similar units have shown that the time to thrombolysis is reduced by >50%, with no difference in adverse outcomes. Although outcome data are still pending, the single most important variable in acute stroke cases remains time to treatment with thrombolytic therapy. This ability to deliver specialized tertiary care virtually in a patients’ driveway is changing the landscape of traditional care delivery models.

As we enter this next step in the evolution of health care, it is worth remembering that hospitals were once a last resort for those who could not afford to receive care at home.”

Colorado also has seen the creation of “micro-hospitals.” Much like critical access facilities, these 20- to 30-bed facilities offer emergency care, short-stay hospitalization, critical care, and operative care in a compact lower-cost setting. Unlike traditional community hospitals, micro-hospitals rely heavily on virtual consultation and protocol-driven care for patients with specific care needs. Community-based virtual care and remote monitoring are leveraged to prevent the need for patients to return to the facility.

The Future of Out-of-Hospital Care

With the increasing pressure to create a health care system that is value oriented, patient centered, and lower cost, there is a need for safe alternatives to expensive hospital-based care. Just as decentralization has critically transformed other industries, such as computing — for example, IBM created the first personal computers to replace complex single-site mainframes, Apple subsequently designed powerful pocket computers, and the Amazon Echo Show could emerge as the newest home health care aid — the reorganization of health care is beginning to take form. As we enter this next step in the evolution of health care, it is worth remembering that hospitals were once a last resort for those who could not afford to receive care at home.

Let’s be clear: hospitals are not going away anytime soon, nor should they. We believe that, while hospitals will still serve a critical role as the underpinning of the care delivery system, inpatient care is not what the typical consumer needs. By de-linking the most essential and basic inpatient care from critical and complex care and by taking advantage of technology to reallocate resources into the community, patients’ homes, and the cloud, we can reimagine the pursuit of high-value care delivery.

Jennifer L. Wiler, MD, MBA

Professor and Executive Vice Chair, Department of Emergency Medicine, University of Colorado School of Medicine; Professor of Health Administration, University of Colorado School of Business; Executive Director, CARE Innovation Center, UCHealth

Nir J. Harish, MD, MBA

Clinical Assistant Professor, Tufts University Medical School

UCHealth System

Richard Zane, MD is the George B. Boedecker, Jr. and Boedecker Foundation Professor and Chair of the Department of Emergency Medicine at the University of Colorado School of Medicine, Professor of Health Administration at the University of Colorado Business School, Executive Director of Emergency Services at University of Colorado Health, and Chief Innovation Office for UCHealth System. Learn more about Richard D. Zane...

Discuss

Brian Ruff

In South Africa, the commercial sector (now responsible for half the spending) has experienced massive growth in the post apartheid era as the white middle class deserted the previously race segregated state provided care sector. Unfortunately, the new policy makers had no policy for the huge growth that followed (futile hope it wouldn't happen or soon collapse). The consequence has been huge investment in new hospitals, each with a focus on the surgical and tertiary units that generate income. There are over 4 acute beds / 1000 members insured, worsening continually.
The community based primary healthcare sector was neglected and its organisational model was the lone general practitioner - the tariff is 'fee for service' paid to the single practitioner. Benefit schedules favour hospitalisation, further entrenching overuse of hospitals.
Our challenge is to create competent community level primary care services built on the model of multi-disciplinary teams practicing integrated care for populations. The aim must be to deliver most services outside of hospitals - knowing that every time a service is done in a hospital bed that might have been done in the community, we spend 100 cents rather than 10 cents. The commercial sector can only be relevant if it gets this right in South Africa.
Brian Ruff

December 21, 2017 at 2:03 am

Vitaliy Ostashko, MD, PhD

"Unlike traditional community hospitals, micro-hospitals rely heavily on virtual consultation and protocol-driven care for patients with specific care needs." - this concept is used in Ukraine at the regional level, and in legislation this model was approved more than two years ago. By the way, this model of organization of health care shows quite good results.

January 03, 2018 at 5:16 pm

Carol Levine

And who will do the daily work of caring for a person ill enough to be hospitalized? A visit by a doctor or nurse or therapist will not feed the patient, change the bedding, monitor the medications, or do any of the important daily tasks that the patient cannot do alone. This model shifts many costs of care to unpaid family members who are typically not trained or supported; they are expected to give up their other responsibilities--jobs, families, life--to "do the right thing." While most people want to be at home rather than in a hospital, and there are certainly advantages, and most family members will do their best to provide good care, the costs to the invisible workforce should not be overlooked.

December 27, 2017 at 9:28 am

Sarah Derrett

This is a very important point. Many households are dependent on two incomes - needing to sacrifice one to be able to care for a hospital-care-needs family member at home has potential to place entire families under financial stress. The healing process may be more effective for patients at home - but not if the bathroom is too small or poorly designed; and not if nutritious food is beyond the income level or skill set of the family; and not if the house is too cold (or hot) to be therapeutic. The potential for change is exciting, but we need to plan carefully to militate against increasing disparities between the wealthy and the poor.

December 27, 2017 at 3:15 pm

Jodi Sperber

You raise a salient point, and one that is both recognized and within many hospital at home programs. Atrius Health and Medically Home, for example, have partnered to pilot their Medically Home Program which is similar to the Hopkins program described in this article. They address daily tasks as a part of the services provided, and if needed will deploy care to assist with the tasks you describe.

One of the areas that I haven't yet seen addressed within the literature on remote care and monitoring is that it is as much about addressing the needs of the whole family and not just the patient. For family situations that are less supportive, it becomes a new challenge to consider when planning care.

December 28, 2017 at 10:29 am

Valerie Reese

I could not agree more with Ms. Levine. While I agree that hospitals are not the best place many times, shifting care to the home means that unpaid family members who may or may not be able to provide the care become the backbone of the health care system.
Unlike their counterparts in the 1840s when most care could be provided in the home and families were extended and lived close, this is not an answer per se today. Until funding makes home care more viable, this shift doesn't seem appropriate

January 23, 2018 at 2:40 pm

Guy Davis

Excellent points Carol.

February 15, 2018 at 10:50 am

George Evans

I agree with the main theme but it's not a new trend. Services have been migrating out of the hospital for years. Recent advances have enabled a broader spectrum of care to be delivered in more appropriately acute settings but the hospital is not going away. The concept that if it doesn't have to be done at the hospital it won't be is important for organizations to keep in mind as they design new facilities. The critical access model with flexible rooms that can be connected to services and providers without regard to geography is promising. One of the key challenges will be sharing data among a widely-distributed care team. . .that often doesn't work as well as reported. A final concern with digital care-delivery is patient experience. Interaction with the care team and bedside manner take a very different shape in the virtual realm and it will be of interest to see how patients respond.

December 27, 2017 at 10:18 am

Paul Shank, PhD, MBA

Technology costs money - a lot of it - and the greater the distance between provider and patient, the less fulfilling the interaction on both sides. This problem has a solution that is evident in every other OECD country - more primary care and universal coverage.

December 28, 2017 at 11:41 am

Meaghan Ruddy, MA, PhD

The points made in the comments about the socio-economic determinants of community care success are important to note. I would add to them the importance of refocusing health professions and non-hospitalist/hospital-based specialty medical education into the communities.

Here lies the value of educational innovations such as the Teaching Health Center Graduate Medical Education (THC GME) program created in the US by the Affordable Care Act (ACA) and administered by the Health Resources and Services Admin (HRSA). This program is creating primary clinical learning environments in community health centers, medical home clinics that reach the medically underserved. This is a keystone piece of the move into 21st-century health care delivery because the on-the-job training of primary care providers builds the context and conditions for their eventual independent practice and if this building is done primarily in hospitals (as educational program sponsors) then the practice habits default to hospital care. BUT, if the building is done in the community, in the clinics where care is most cost-effective and efficient, then the practice habits will default to that. In other words, providers practice how they train and if we want providers to practice authentically in the community we should focus the largess of their training there.

This is an enormous shift for graduate medical education (GME) both at the program/faculty/resident level as well as at the level of accreditation. Currently, the ACGME's new Clinical Learning Environment Review system, which is an amazing innovation in its own right, is focused entirely on hospital environments. The hospital has become synonymous with educational institution, and if the move toward decentralized care is to truly take root, this frame of reference must also be systematically addressed.

December 29, 2017 at 10:20 am

Vitenshtein Alon, PhD

These wonderfully creative ideas were originally published in 2009 in "The innovators prescription" written by Clayton Christensen. A world leading business thinker, Christensen discusses these ideas in deep as well as a wide range of other ideas that can reform the ailing healthcare system.

December 31, 2017 at 12:52 am

Siva Narayanan

An interesting evolving concept that is sure to test and potentially expand the boundaries of efficiencies of care-continuum in the U.S healthcare system. Certainly a number of questions remain to be answered for the system to recognize its potential, incl. investments in technology, widening of care partnerships, transformation of primary care (incl. any influence from CVS-Aetna merger, if approved) and avoidance of unforeseen shift in care burden among the key constituents of the healthcare system. Beyond introducing efficiencies and cost savings, another upside to this concept is the opportunity to preserve key expenditures for high value innovations that are life extending/saving.

January 01, 2018 at 12:49 pm

tiberio damiani

The article exposes several points to be discussed. The first is the "small" hospital often far away from main centers and also serving a community without displacements, not only for patients but also for caregvers and families; the time and personal resources of caregivers and families should get more attention in general health processes management. The second point is the cultural and economic role of a small hospital in the community, especially the rural communities, where relationship are different as in the cities, a small institution can help health processes to get better outcomes (health, social and personal) through personal contacts. The further point is the possibility to build a closer health network between GP and small hospital, because nearness, inclusive of home care delivers. This has been , until august 24th 2016, the common way of working in the Ambito territoriale 24 of Marche Region (Italy) where was active the Amandola hospital, until the earthquake, which caused his evacuation. The hope stays for complete reopening of this hospital, because until now it was possible to reopen outpatients clinics without having hospitalisation. Amandola hospital had general medicine and surgery and technological services for advanced health checking, and for providing a safe assisted transport to the next central hospital (Ascoli Piceno or Fermo 50 km of mountain road). Since at least 20 years Amandola hospital is connected with domiciliar integrated health care system, with nursey, therapists and several specialists, especially for ageing population needs. This integrated network did help also the management of several cases of mental health dept. diseases, where I work, reducing hospitalisation and consequent need of sheltered houses admissions (4 in 20 years over 120 patients) and improving health processes, especially of psychotic patients.

The last point about small hospital is a cultural one, for clinicians nursey and health professionals. How often stays the small hospital and the integrated health system at home under scant regard and little understanding in the general way to consider medical organisation from university up to the work?

February 02, 2018 at 1:13 pm

Nancy English Ph.D. RN

This is an idea whose time is past due. Decentralized care would be more efficient and way less costly. Yet how can this happen when mega 'health' complexs are being built and as the article mentions hires many people. The politics and loss of profits may be the biggest barrier to efficiency and better service. In Cuba decentralization has worked for years. The Community Health Clinics, fully staffed are in the neighborhood. Their triage system works, hospitals are utilized for the very ill. There are many problems of course with their political system yet when we equate health and care with stockholders profits, we are doomed. This is the ultimate of conflict of interest, there is no motivation for improving the service. Thanks for your timely and thought provoking article!

February 15, 2018 at 10:46 am

mary ellen gulsrud

Excellent article, as a certified RN of over 40 years in Oncology, Case Management and preciously Infusion, I applaud the thought to decentralize patient care to skilled home health care, day surgery centers and tele-monitoring. This is the wave of the future, it can no longer be dismissed. I have witnessed the lack of compassion and in some cases integrity in large medical center acute care facilities. The focus on money and catering to a few “ profit inducing surgeons” has come to an end! Human Resourses departments have bled the life out of the most compassionate and selfless caregivers with their monetary focus and treating RNs as part of the hospital bed cost.
We do so much more, and that superb care, compassion, and health education through empowering people to take ownership of their health, has been scientifically proven to be overwhelmingly successful through the utilization of skilled and non skilled home care services. Home is where people feel safe, and secure while healing.
Thank you for this hopeful article of health care’s projected future.
Mary Ellen Gulsrud BSN, RN, ONC , CCM

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